lenders Blog Posts

Philosopher George Santayana once said, “Those who cannot remember the past are condemned to repeat it”. In light of recent actions in the mortgage lending industry, we all may be able to experience the thrill ride of 2007-2009 all over again…soon. You may wonder what actions I am referring to so let me share a brief list of what I will call the top ten contributing factors to the downturn I see happening by July of 2017.

The Network of State Appraiser Organizations has prepared a letter to Melvin L. Watt, Director of the Federal Housing Finance Agency (FHFA), addressing the concerns appraisers they represent have with FNMA's Collateral Underwriter (CU) program. The Organizations' stance is that since the data is originated and collected primarily through appraisal reports it should be made available to appraisers in addition to lenders, mortgage companies, and AMCs. We agree.

While much has been written about the multitude of complex reasons behind the collapse of the real estate market in 2007, it is the opinion of this writer that there is one primary reason for the collapse. Simply stated, banks loaned money to borrowers who lacked the ability to pay back the loan. That’s it, pure and simple. If you loan money to someone who has no resources to pay back your loan, you will lose money almost every time and it matters very little if you have any collateral for the loan. This should be known as the prime directive: “Thou shall not loan money to someone who cannot pay you back.” There certainly are many other reasons behind the collapse, but if the “system” had not violated the prime directive the collapse would not have been so sudden, so precipitous, and so prolonged

With mortgage rates hitting new lows, more consumers are seeking to take advantage of a good thing and either buy or refinance homes. More consumer interest means appraisers will be called upon more to deliver property valuations.

While more work requests is always a good problem to have, there are some side effects to bear in mind next time you're in the field....

In This Episode - Earlier this year, Fannie Mae announced the launch of its Appraiser Quality Monitoring system, or AQM. Essentially, the AQM is a government-derived type of system that monitors the quality and consistency of your appraisal reports. With this system in place, the agencies will be able to determine whether your work requires consistent, ongoing review or if you will end up on government-level “do not use” list.

Here on the FREA blog, we recently ran a two-part series on blacklisting that brought to light the serious and long-term ramifications of being placed on a “do not use” list by big banks and AMCs. In response to Part 1 of the series, we received an email from a FREA member who expressed his concerns with the changes and trends taking shape in the appraisal industry. With permission, we’ve reprinted his exclusive letter to the editor, in which he further explains the underlying issue of being denied access to client communications, relates the struggles of today’s appraisers, and suggests a call to action...